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Should you invest in gold as interest rates rise?

Gold can help you add safety to your portfolio amid stubborn inflation and market volatility.

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For more than a year, the Federal Reserve has made a law Series of interest rate hikes Designed to reduce inflation. While you may have felt the pinch in your wallet, you may also be feeling it in your investment portfolio, as the economic environment encourages market volatility.

In times of uncertainty like the one we’re facing today, some investors are turning away Stable investment options like gold To help mitigate some of the risks they may face elsewhere.

Gold can be one A good investment in any economy, depending on your individual goals and overall portfolio. But today’s high inflation and rising rates as well as concern a A recession is coming – You may want to consider how to do this Do yourself a favor today.

Get started by exploring your gold investment options with a free information kit.

Should you invest in gold as interest rates rise?

Here are a few reasons why gold can make a good investment option in today’s high rate environment.

Gold can help you diversify

diversity An important part of your investment strategy no matter what the market is doing. Gold can make a good variety During volatile markets as its performance does not usually follow the ebb and flow of the stock. So, when other aspects of your portfolio decline, an asset like gold can help keep you afloat.

However, it’s important to diversify in a way that makes sense to you. Investing in gold amid high inflation and rising interest rates doesn’t mean you forgo long-term investment growth for fear. Many experts recommend About 5% investment Your portfolio in assets such as gold, so you can maintain greater growth potential than traditional markets over time.

“There are always two or three main things in the market that can make investors nervous,” says Scott Sturgeon, CFP, founder of Orade Wealth Advisors. “Overcoming these emotional hurdles can go a long way in determining which investments are appropriate for your risk tolerance and financial needs.”

Explore gold investment options that fit your long-term strategy with a free Investor Kit

Gold prices are increasing

Over the past few months, gold prices have risen steadily and even nearly surpassed their all-time highs. Experts believe this is largely due to a combination of inflationary pressures and recent times Crisis in the banking industry – Leads people turned into gold As a form of stability.

Although the future is difficult to predict, some experts believe that gold prices may remain high or rise in the coming months. “From an investor’s perspective, we haven’t seen the peak yet,” Baruch Silverman, investor and CEO of Smart Investor, a financial education website, said recently. CBS News.

despite Recent performance of gold, rising interest rates do not necessarily correlate with rising gold prices. In fact, gold prices fell when the Fed first started raising rates in March 2022. But the rate hike won’t last forever and Adding gold to your portfolio A safe haven can benefit you even if the price fluctuates.

A free investment guide can help you learn more about gold investing today.

Gold can hedge against inflation

The catalyst for today’s rising interest rates is largely due to runaway inflation that has made travel more expensive since the pandemic, from groceries to fuel.

Although rising rates are designed to bring down inflation, it may still take a long time for that to happen. The rate has increased slightly Inflation rate has been brought downBut that’s still far from the Fed’s 2% target.

Since ongoing inflation keeps the value of the US dollar down, it can be a good indicator of gold prices. Historically, gold price Tends to do well when inflation reduces the dollar’s spending power. So, like many people, A is leaning towards gold Hedge against inflation In the past, this may be worthwhile now as inflation affects your spending.

Bottom line

With interest rates on the rise, there are a few reasons why you might consider investing in gold today. Ongoing inflation and other factors affecting the value of the dollar have led to the rise in gold prices and is a good way to diversify and potentially hedge against inflation over time.

If you’re thinking of adding gold today, make sure you take into account your entire portfolio and long-term financial plan, so you can determine the right allocation and gold investment for you.

Learn more about gold investing now with a free investor kit.

MoneyWatch: Managing Your Money

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